Who qualifies for free tax preparation?

- You see the ads online and on TV this time of year, claiming to file your taxes for free.  But you might be surprised to find those programs are anything but free.

You start by completing the questions to figure out your deductions and credits, what you're eligible for, and what forms you need to send the IRS.  But as the software sees the need for more complex forms or advice, it will prompt you to upgrade.

There are so many simple things you might do to earn money that make your tax return to complicated to file for free.  Do you freelance? Use Airbnb to rent out your place? Or maybe have a lot of investments?

Once you start claiming any itemized deductions or adjustment, the basic free package probably isn't going to cut it for you.

But there is something else to think about: you can get help filing for free from the IRS if you fall into certain income brackets.   The IRS offers an income tax assistance program if you make less than $54,000.  Your forms will be completed by trained volunteers, but again they won't do complicated returns. 

This is also available to people with disabilities or limited English.  And a similar program called tax counseling for the elderly specializes in helping people over 60.

Or if you're good with taxes finances and numbers, you can always go to IRS.gov and do free file forms.  But you have to know your stuff to get through it.  Let's just say it's not exactly intuitive.

The bottom line? You can probably only use the basic free software if the following applies to you:
- Made less than $100k
- Don't own a home or rental property
- Didn't sell investments
- Don't own a business or have 1099 income
- Don't have major medical expenses

So most of us will end up having to pay money to find out how much money we owe -- or, hopefully, get back.

We're two months away from tax day, by the way.  And while that sounds like plenty of time, the best way to avoid tax fraud scams is to file early.

 

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